Chester's International Franchise Cost & Fees

Date of Incorporation:2002

Franchising Since:2004

Headquarters:Alabama

Country: U.S.

Description: The franchisor grant franchises for quick-service Restaurants operating under the Chester’s name that sell chicken and sides. Chester’s Restaurant offer a special selection of menu items like bone-in chicken, chicken filet, chicken filet sandwiches, chicken tenders, and an assortment of side orders like fried potatoes, vegetables, biscuits, toast, and salads.

Franchise Offer: The franchisor grants the franchisee the right to establish and operate one or more franchised Chester’s Restaurants in a specific market. The restaurant will be located in a supermarket, convenience store, or other structure like a shopping mall, food court, stadium, or strip mall. The franchisor may require the franchisee to offer a limited menu because of space restrictions or other limitations.

Financial Assistance: The franchisor does not offer direct or indirect financing nor do they guarantee any note, lease, or obligation.

Training and Assistance: Before the Restaurant opens, the franchisee and their Designated Representative must attend and satisfactorily complete the initial training program. There is 35 hours of classroom training that covers such things as food preparation procedures, restaurant management and marketing.

Territory:Under the franchise agreement the franchisee will have no territorial protection. The franchisor and their affiliates have the right at all times during the franchise term to engage in any and all activities we deem appropriate, at any time or place. The franchisor may establish other franchised, licensed, or company-owned outlets that compete with the location.

Term of Agreement and Renewal:The term of the franchise agreement is 10 years with an option to renew for an additional 5 years. The fee for renewal is $2,500.Obligations and Restrictions:If the franchisee is a legal entity, they must designate a shareholder, member, or partner, depending on the entity, with at least a 15% ownership interest in the franchisee to be the Designated Representative, responsible for overseeing and supervising the Restaurant's overall operation. The franchisee must offer and sell all menu items and products, and perform all services that the franchisor periodically requires for Chester’s Restaurants. The franchisee may not offer or sell any menu items or products, or perform any services that the franchisor has not authorized.

Total Number of Units:The total number of franchised units for year ending 2006: 30.
Investment Tables:
Initial Investment for In-Line store:

Name of Fee

Low

High

Royalties

$20,000

$20,000

Insurance

$3,000

$10,000

Pre-opening Salaries, Travel and Living Expenses during Initial Training

$5,000

$10,000

Build-out Cost to Existing Building to Accommodate Restaurant

$47,370

$96,000

Equipment, Furniture, Signage and Fixtures

$87,500

$147,400

Initial Inventory

$5,625

$9,000

Grand Opening Advertising

$1,000

$4,000

Utility Deposits, Fees and Business Licenses

$1,200

$5,000

Additional Funds (3 months)

$15,000

$40,000

Total (excluding real estate lease and purchase costs)

$185,695

$414,400

Ongoing Fees:

Name of Fee

Amount

Royalty

4% of Gross Sales

Marketing promotions Fund

Up to 1% of Restaurant’s monthly gross sales

Local Marketing Expenditure

3% of gross monthly sales

Cooperative Advertising Program

3% of gross sales

Additional training and Assistance

Not to exceed $50 per day plus out-of-pocket expenses

Transfer

$3,000 per restaurant

Renewal Franchise

$2,500

Late Fee

10% of original amount due but not paid on time

Interest

1½% per month or highest commercial contract interest rate law allows, whichever is less

Indemnification

Will vary under circumstances

Attorneys’ Fees

Will vary under circumstances

Testing

Cost of testing

Computer Systems, Maintenance and Support

Cost of service

Audit

Cost of inspection or audit

Year of FDD: 2008

The above information has been taken from the UFOC/FDD of Chester's International.